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AIZ Expands Mobile Service Contracts

Zacks Equity Research

In an effort to expand its footprint in the mobile marketplace, Assurant Solution, a unit of Assurant Inc. ( AIZ) agreed to acquire Lifestyle Services Group of United Kingdom from Phones 4u Finance plc. The all-cash transaction will cost Assurant $160 million.  Lifestyle Services Group is a leading provider of mobile phone insurance.


Assurant found the Lifestyle Services Group for phone insurance an attractive buy because of its large customer base of more than 8 million customers and yearly revenue generation of approximately $185 million. It markets its products via leading banks and retail mobile network operators. 


The transaction will see light in the last quarter of this year and therefore will not be accretive to 2013 earnings. It is estimated that the acquisition will have minimum effect on 2014 earnings, however, synergy will be realized beyond 2014. 


Assurant serves mobile customers in 16 countries, reflecting its expanded capabilities and global footprint. 


This acquisition by the company is in sync with its growth target for domestic and international extended service contracts. The company is making a steady progress in its mobile franchise. In July, the company announced a fee-based relationship with T-Mobile through the company’s JUMP!TM phone upgrade program.


The company also collaborates with U.S Cellular and Sprint to serve Boost Mobile and Virgin Mobile. These mobile partnerships will drive long term top line growth at the Assurant Solution.


Assurant currently carries a Zacks Rank #3 (Hold). Other players – Eastern Insurance Holdings, Inc. ( EIHI), FBL Financial Group Inc. ( FFG), Kemper Corporation ( KMPR) all with Zacks Rank #1 (Strong Buy) are worth investing in.

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